The life cycle of a product is generally traceable using logistics. Supply chain logistics begin with the manufacturing of a product and generally govern the manner by which the product is made, sold, packaged, shipped, delivered, and inventoried under wholesale conditions. The supply chain continues at the retail level where individual retail locations store inventory for sale to the public.
Of the many variables affecting logistics, the variable most likely to cause interruptions within the supply chain is human error. Human error makes it very difficult to capture a true picture of the entire supply chain because every human error propagates throughout the supply chain. For instance, a mis-keyed order for a pallet of products may affect a retailer's ability to shelve products, while the same error may result in collections issues for the wholesaler's accounts receivable. There are innumerable examples of human error negatively impacting supply chain logistics. The result of each human error is that logistics data is increasingly difficult to find, sort, and verify. Even if data is readily available, human error renders such data unreliable. Data availability and reliability is affected until errors are located and repaired; however, locating the error requires additional data analysis at an expense that is often times unquantifiable. Because the marketplace strives for efficiency and exactitude, there has been an effort within industry to automate many tasks that are particularly susceptible to human error to save unnecessary costs associated with the supply chain. It is thus a primary object of the invention to reduce the amount of human error affecting supply chain data.
The opportunity for human error occurs at even the earliest point in the supply chain, which begins with the manufacture of the product. If a retailer's goal is to have an accurate and reliable system for placing orders and tracking inventory, then supply chain logistics constitute not simply inventory control within the retail store, but rather more preferably requires an analysis of an entire supply chain. Typically, manufacturers apply identifying information to products at a lot level, rather than an individual level. For example, a product may be manufactured and placed in a container bearing a UPC code, lot number, and sell by date. Collectively, these pieces of data yield information about a group of products, rather than individual products alone. Errors traceable to human intervention are compounded by the fact that many retail items are sold and shipped in large lots, thus rendering errors with respect to individual products virtually untraceable. It is thus an object of the invention to objectively assign an identity marker to an item in a manner that facilitates the location of individual product units. It is a further object of the invention to create a finer level of product visibility throughout the supply chain.
Another important facet of supply chain logistics is loss prevention, which occurs before and during a retailer's possession of inventory. Loss prevention, at its core, comprises a logistics system designed to identify goods that have been damaged, stolen, mishandled, misidentified, or misplaced. Loss prevention is important to retailers because profitability often turns upon the proper management of risk and inventory. For example, if a retail location allows all inventory to be stolen by its customers, then the retailer has done a poor job of managing its inventory. If a retail location allows its inventory to spoil due to improper refrigeration of time-sensitive product, then the retailer has done a poor job of managing its risk.
The first task of supply chain loss prevention involves awareness and acceptance of certain risks associated with upstream supply chain corruption associated with shipping and freight damage. Any damage represents a cost, and accurately assigning the responsibility for cost due to freight damage is important to retailers. It is important for retailers to not allow the cost of freight-damaged goods to be incurred by the retailer even before the item is placed on shelves. It is therefore an object of the invention to permit retailers and shipping companies to objectively identify the condition of an item during shipping.
Retailers in the prior art, when assessing the extent of damage caused by shipping, rely heavily upon visual inspection and subjective grading of the condition of the exterior of the container to make a decision on whether to accept the goods as delivered or to reject the goods and return them to the manufacturer. Visual inspection is not a reliable way to assess true damage because many items are packaged in brown boxes that may appear intact while the contents may be irreparably damaged. For example, when perishable food is destined for retail sale, a visual inspection of a perishable item typically cannot assess temperature variation or potential spoliation caused by delay or other compromise in the supply chain. Often times only the most substantial temperature variations will offer a visual cue, such as when frozen food is visibly thawed. Thus, visual inspection is not a reliable way to assess the true injury to shipped products also because the shipping container may be sealed and thus conceal the true extent of the damage. It is therefore an object of the invention to minimize the subjectivity associated with human visual inspection of goods at various points during any supply chain. It is also an object of the invention to allow for gathering of objective data associated with an item under a variety of shipping conditions, including temperature fluctuations, applied force, and duration of shipment.
There are additional problems with traditional supply chain logistics from the standpoint of upstream supply chain integrity. For example, when an item arrives at a retail location, the arrival of the item to the retail location is recorded most typically using manual entry of data, whether by keyed data entry, handheld scanner, or some other method of human-involved data entry. Human intervention, at this level, is a considerable source of error. For example, a human operator may mistakenly mis-key data and may overstate or understate the true quantity of the goods that are actually received by the retail facility. These errors are not self-canceling. Instead, an error of this nature alters the inventory and accounting system in a dramatic way because the assets of the retailer are misstated. It is therefore an object of the invention to minimize human involvement in the way that retail establishments receive shipped goods.
A second component of loss prevention is accounting for starting inventory in order to compare starting inventory with inventory that has been sold. Such accounting comparison of inventory sold against inventory kept on hand is made possible by subtracting the amount of product sold from the retailer's starting inventory. This calculation is performed in order to accurately assess the amount of loss due to theft or destruction of the item while on the shelf. In order to accomplish this routine task, the retailer must devote a substantial amount of employee time and labor resources to periodically audit the status of current inventory. A retailer's ability to properly quantify loss attributable to theft or destruction is difficult, costly, and time-consuming; as a result, the true extent to which the retailer is suffering theft or loss is generally not known until after substantial, non-recoverable losses have already occurred. Before the invention, this type of accounting and inventory analysis was an expensive cost of doing retail business. It is thus an object of the invention to allow a retailer to have a real-time understanding of existing inventory in a store without the need to use employees to manually count the number of items remaining on the shelves. The invention has a goal of minimizing or eliminating human error and involvement in establishing or maintaining current inventory.
A third component of loss prevention is the active monitoring against shoplifting and employee theft. This is generally accomplished by a combination of sophisticated surveillance equipment and loss prevention personnel. A comprehensive approach to preventing theft involves many different facets, yet none of the prior art establishes a continuous and streamlined approach to true inventory management. As one example of prior art, retailers have adopted technology that employs anti-theft markers as embedded within item packaging or affixed to the goods using fobs. These embedded markers, or tags, typically require human input on many levels, but the most illustrative demand for human intervention is the requirement that the checkout cashier deactivate the product marker at the check-out counter. While activation of the security system requires substantial human involvement, it is clear that deactivation is required to allow the item to be removed from the building without actuating an anti-theft deterrence alarm system. As testament to the strong prevalence of human error in the retail industry, most consumers have experienced for themselves situations where a retail clerk erred in failing to deactivate the anti-theft marker embedded within or affixed to a lawfully purchased item. The impression upon the consumer a negative one, meaning such common occurrence is counterproductive to the reasonable goals that a retailer has in striving to offer a reasonable and comfortable shopping experience to every consumer. This example carries a further drawback in that it does not prevent employee theft, as employees have access to the deactivation units. It is thus an object of the invention to minimize human involvement in connection with loss prevention.
There are additional human costs associated with theft prevention, including those costs associated with hiring personnel for the express purpose of actively monitoring customers and employees to guard against theft. While the hourly or salaried costs are identifiable, they are nonetheless an expense to the business. Further, there are hidden costs and expenses retailers ultimately must bear, including litigation costs associated with overzealous loss prevention personnel. Further, where loss prevention personnel are strident and prevalent, the level of consumer satisfaction is lowered. It is thus an object of the invention to minimize human involvement while actively guarding against theft by monitoring customers and employees. It is a further object of the invention to implement a more silent, less intrusive system of inventory monitoring than those found in the prior art.
The component of the supply chain immediately downstream from loss prevention is how best to market and sell goods to consumers. Retail marketing, at its core, involves the display of individual items. In most retail settings, goods are strategically positioned throughout a retailer's store. The retailer may provide a flyer listing sales to the customer, while in-store displays or placards may attempt to draw consumers' attention to a particular product. Such a marketing strategy represents a one-size-fits-all approach to every consumer, even though retailers may possess valuable purchasing history relative to individual consumers obtained through loyalty programs or other purchase records. Furthermore, such in-store advertising does not recommend complimentary products based upon the contents of a customer's shopping basket or cart. It is an object of the invention to provide targeted in-store advertising based upon a customer's prior purchasing history and/or upon complimentary items in a customer's possession in the store.
In addition to the physical presence of goods, pricing is a primary component of any display of retail items. In many retail settings, the pricing of an item is displayed to a potential customer using any number of different methods, including adhesive labels, hanging fobs, shelf labels, or point-of-purchase display placards. In the event a retailer desires to increase or decrease the price of a given item in immediate response to changes in pricing factors, the potential increase in profits attributable to the price change must clearly outweigh the inherent labor costs associated with manually changing the pricing displays associated with the product. That is, it does not make sense for a retailer to make only a slight adjustment in price, even though doing so could marginally boost sales because the retailer would have to incur the labor expense attributable to physically changing price displays. Further, the process of manually changing prices is inefficient, as a price change requires an expense of materials required to re-price items already placed on the shelves. All of these hidden costs decrease the retailer's profitability and factor into any choice to increase or decrease the retail price of an item. It is thus an object of the invention to allow retailers to make adjustments in pricing for retail goods without incurring the substantial cost of labor and materials to do so. It is also an object of the invention to permit retailers to save money on training employees for tasks that are no longer necessary.
There are also other problems associated with re-pricing existing items on the retail shelves. Regardless of the employee time cost, human error may further defeat profitability because each opportunity for human intervention in a retail situation comes with inherent risk of error such as mislabeling, miscounting, or misplacement. It is thus an object of the invention to provide a manner by which the pricing structure on a given item may be modified from a one location, even from a centralized home office location, without the requirement of direct human contact at an item-by-item level.
Item-level re-pricing is also something that retailers have not yet before been able to realize without significant human involvement. For example, oftentimes a retailer will discontinue a line of goods and reduce the price significantly in order to motivate customers to buy the item, thus allowing the retailer to recapture at least some of the retailer's initial investment in the goods. In order to do so, the retailer must send an employee to locate the discontinued item and either re-price the items individually using the current location or, alternatively, remove all remaining items and place them in an area of the store that is devoted to clearance-priced inventory. Discontinued goods thus cost the retailer not only in decreased sale price but also in added human cost of retrieving and monitoring shelves for clearance or out-of-date items. It is thus an object of the invention to permit retailers to conduct item-level pricing, including item-level clearance pricing, without substantial human involvement.
Furthermore, as retailers are increasingly relying upon computerized retail point of sale systems, any price change for a product which is associated with a traditional UPC bar code must also be changed in the retailer's pricing database or computer system. Thus, as a regular function of even a slight price change, a retailer must make a corresponding price modification in its pricing database, whether such database is stored at the local level or at the home office database. These many variables surrounding re-pricing comprise hidden costs to a retailer, and were, prior to this invention, understood as a cost of doing business. It is therefore an object of the invention to implement a system of tracking retail goods in a way that minimizes the existence of human error occurring in connection with pricing and re-pricing not only in connection with a specific item or floor display but also in connection with a larger pricing strategy as tied to a central database.
Other serious problems in the supply chain may include routine misplacement of a given product in connection with shipping; mishandling or improper storage of product; and human error due to improperly shelving or labeling the product. It is further an object of the invention to have a tracking system in place that permits an item to be marked or identified early in the supply chain to minimize corruption to the product and data associated with the marked item from events such as shipping and freight damage, misplacement of product due to shipping, improper storage conditions, human error due to improper shelving or price labeling, and to allow retailers to identify the status, condition, and location of the identified item without substantial human interaction. That is, the invention has a goal of minimizing or eliminating human error in connection with the entire supply chain, if desired.
U.S. Pat. No. 6,089,453 (the “'453 patent”), issued to Kayser et al, discloses an electronic shelf price tag capable of changing price in response to an external signal. The '453 patent suffers from several notable deficiencies. For instance, in order to obtain inductive power the shelf price tags must be wired into the shelves, and as such the shelf price tags are not capable of being applied to items capable of moving throughout a retail location, such as products or devices associated with people like employee identification badges. Further, in order to update prices on the shelf price tag, human involvement is required insofar as a handheld scanner must be used to read a barcode and upload the appropriate information to the shelf price tag. Finally, the shelf price tags are not capable of interacting with nearby products themselves; rather, the shelf price tags are only capable of interacting with a human-controlled interface. It is an object of the invention to provide an automatically updatable shelf tag capable of being easily moved in a retail location that can interact with other products, assets, and devices in the tag's proximity.
U.S. Pat. No. 4,973,952 (the “'952 patent”) and U.S. Pat. No. 5,995,015 (the “'015 patent”), issued to Malec et al and DeTemple et al, respectively, disclose systems for displaying information at various points in a retail location. The '952 patent utilizes signals placed at predetermined locations throughout a retail facility to display predetermined messages on a display mounted to a shopping cart. The most notable drawback to the '952 and '015 patents is that the location of the trigger signal, the products nearby the signal, and the message to be displayed by the shopping cart must be preprogrammed into the shopping cart's memory by a person. Likewise, the '952 and '015 patents require advance knowledge of the proximity between programmable shelf tags and the products with which the shelf tags are associated so that a human may manually update the programmable shelf tags. It is an object of the invention to automate the association between products and nearby displays so that no knowledge of the proximity of products and displays is required to update prices for the products on the nearby displays.
U.S. Pat. No. 6,313,745 (the “'745 patent”), issued to Suzuki, discloses a recommendation system for a retail location fitting room. A tag is affixed to a piece of clothing, and an in-store terminal reads the tag. The terminal analyzes each product and displays recommendations for the customer based upon the items in the fitting room and upon the customer's purchasing and/or fitting history, if any. The '745 patent is deficient because the product tags are incapable of communicating with anything except the terminal, and thus the product tags only store information about themselves and not associations with other products, assets, or devices. Because the tags cannot process or store information in real time and only provide pre-programmed data, the terminal may recommend products that the customer already browsed but ultimately rejected. That is, because the tag cannot store information about where a customer browsed, the terminal may erroneously recommend products from a location that the customer already visited. It is thus an object of the invention to provide a system in which products store information in real time about their surroundings, including other products and locations, so that a complete picture of a customer's shopping experience may be captured and analyzed.
The invention meets the above objects by providing a real-time, peer-to-peer, horizontal communication framework in which products, assets, and devices communicate with one another to provide detailed, item-level information about location, movement, price, and other retail logistics metrics.